A Tale of Two Journals

For Christmas 2008, my right-wing dad-in-law got me a subscription to the Wall Street Journal.  I guess he figured that since I had been laid off, I could benefit from the wisdom of the Masters of The Universe to help me get back on my feet again.  After ignoring the paper for a few months and sticking it into my recycling bin every day, unread, I decided to start actually reading it every morning, for shits and giggles if nothing else.

As I expected, the editorial and op-ed sections did nothing but piss me off more than I already was at the rich and super-rich assholes who had caused people like me to lose my livelihood, while continuing to pad their own bank accounts.  For a while, Thomas Frank had a regular weekly column, but more often than not you had to step through the steer droppings left by the likes of Karl Rove, Peggy Noonan, Daniel Henninger (“capitalism saved the Chilean miners!“) and Kimberley Strassel when you ventured into those pages.

But the Journal, even under the ownership of Australian megalomaniac and conservative power broker Rupert Murdoch, has maintained a high standard in their news reporting, and their other sections often contain interesting and thought-provoking articles.

So it was amusing to read the Journal on Saturday and see two articles that utterly contradicted each other.  First, this article on the expanding mortgage fraud debacle, which notes the “technical problems and legal challenges” that are causing bank stocks to slide, but still places the blame squarely where it belongs – on the people who had the audacity to take out the loans in the first place:

In essence, fast-paced modern finance is colliding with the much slower machinery of the U.S. legal system. While finance aims for efficiency and maximized profits, the courts demand due process. And that’s becoming a growing issue as lenders come under attack for taking short cuts to oust homeowners who haven’t mailed in a mortgage check for months…

Industry executives note that few, if any, borrowers in the foreclosure process dispute the fact that they’re not paying their mortgages. “We’re not evicting people who deserve to stay in their house,” James Dimon, J.P. Morgan chief executive, told analysts Wednesday.

Then there is this article, which indicates that perhaps the problems lay with the loan sharks themselves:

Even before the mortgage meltdown, the servicing industry “was plagued with problems,” such as servicers charging unauthorized or excessive fees and making false or unsubstantiated statements about how much borrowers owed, says David Vladeck, head of the bureau of consumer protection at the Federal Trade Commission, which has brought several recent cases against servicers. Mr. Vladeck said the FTC is now trying to “drill down” to make sure the servicers it regulates have the proper procedures in place to make sure underlying documentation is sufficient and accurate…

The consequences are causing a nightmare for the loan-servicing business and borrowers. For example, Fabiane Correa and her husband Luiz got a notice in September from Bank of America Corp. that the mortgage on their Stamford, Conn., house was in default. The couple also was told that $6,638 was past due.

Earlier this year, Mr. and Mrs. Correa got a loan modification from the Charlotte, N.C., bank as part of the Obama administration’s foreclosure-prevention program. She says they have made their required loan payments since then.

“It’s very emotional and frustrating,” Mrs. Correa says. The couple drove to Dedham, Mass., a 360-mile round trip, to meet with a Bank of America representative in an unsuccessful effort to resolve the problem. A BofA spokeswoman says the bank is looking into the matter.

And wouldn’t you love to be a “BofA spokeswoman” right now?  I know I would!

Josh Ritz, who lives in Kent City, Mich., pulled $4,400 out of his retirement plan last year after Bank of America said he needed to pay that amount to catch up on his mortgage payments. He kept making his monthly payments until April, when a BofA employee said the bank didn’t want his money because the loan was past due, according to a court filing in Kent County, Mich., where Mr. Ritz is trying to block foreclosure.

Mr. Ritz and his wife “tried to do the right thing, and they came out worse,” says Karen Tjapkes, the couple’s lawyer. She adds that it took BofA about six months to apply the $4,400 payment to their mortgage account.

A BofA spokeswoman declined to comment, citing pending litigation, but said the company “will research his concerns and address them directly with Mr. Ritz and his counsel.”

Some bankruptcy-court judges have recently criticized loan-servicing operations for sloppy recordkeeping and dehumanizing customer service. Earlier this month, in a longstanding case U.S. Chief Bankruptcy Judge for the Western District of Pennsylvania Thomas Agresti said in a memorandum opinion and order that Countrywide Financial Corp. acted with “reckless disregard” in its treatment of a borrower who had successfully completed her bankruptcy and paid off all her debts.

The borrower, Sharon Diane Hill, was current on her mortgage, Yet Countrywide threatened to foreclose on her home if she didn’t pay thousands of dollars in additional fees, according to court filings. Ms. Hill “did everything right” but was still “put through a grinding process by Countrywide,” the judge wrote in his order. The mortgage industry should “take to heart just how devastating” its mistakes can be for borrowers, he added…

The industry’s problems have been complicated by the transfer of loans from one firm to another as part of the securitization process and the demise of hundreds of mortgage companies during the financial crisis.

So, depending on which page of the WSJ you read, the problem is either deadbeats not paying their mortgages, and who deserve to be kicked out of their homes, or an unaccountable system of mortgage brokers and servicers slicing and dicing mortgages and obfuscating who the actual owners are, to the point where people who are current on their payments are being thrown out of their homes.

They report; you decide.

UPDATE:  Via Atrios, more stories of people making their payments on time and still getting fucked over.  I guess it was their fault for not renting.

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